TMTPOST -- The American depositary receipts (ADRs) of Alibaba Group rose 8.1% to US$135.97 on Thursday, hitting their highest close since November, 2021. Shares rallied as China’s No.1 e-commerce company posted stronger-than-anticipated results, highlighting the momentum driven by the aggressive artificial intelligence (AI) push.
Credit：Alibaba
Both of Alibaba’s top and bottom line are ahead of Wall Street’s projections. Revenue for its third fiscal quarter ended December 31, 2024 gained 8% year-over-year (YoY) to RMB280.2 billion (US$38.4 billion), beating analysts estimated RMB277.4 billion. Revenue delivered its fastest pace of growth in more than a year, further accelerating from a 5.2% YoY increase three months earlier.
The bottom line comfortably beat estimates again. On Non-GAAP basis, Alibaba earned RMB21.39 diluted earnings per American depositary share (ADS) for the December quarter with a 13% YoY increase, versus analyst expectations of RMB19.47 per ADS. Net income attributable to ordinary shareholders came in at RMB48.95 billion, more than tripling from a year ago. Analysts expected the net income would be RMB40.6 billion. The non-GAAP adjusted EBITA, excluding share-based compensation expense, impairment of intangible assets and goodwill and certain other items, climbed 4% YoY to RMB54.85 billion, reversing a 5% decline from July to September.
“This quarter’s results demonstrated substantial progress in our ‘user first, AI-driven’ strategies and the reaccelerated growth of our core businesses,” Alibaba CEO Eddie Wu said in a statement.
Alibaba’s bread and butter Taobao and Tmall Group, which includes two major online marketplaces, generated RMB136.09 billion for the December quarter. That represent a YoY increase of 5% YoY, accelerating from a gain of 1% for the previous quarter. The adjusted EBITA of the top business segment grew 2% YoY to RMB61.08 billion, compared with a 5% YoY decrease for the September quarter. Alibaba said the EBITA gain was primarily due to the increase in revenue from customer management service, partly offset by the increase in investment in user experience. Customer management revenue for the third fiscal quarter added 9% YoY to RMB10.08 billion.
Cloud Intelligence Group, which houses Alibaba’s AI-related projects and hosts computing power for external clients, posted fastest revenue growth in about two years. The division brought RMB31.74 billion with a 13% YoY rise from September to December, more stellar than a 7% increase in revenue for the previous quarter. Alibaba mainly attributed the momentum to a double-digit public cloud revenue growth, including the growing adoption of AI-related products. Notably, AI-related product revenue maintained triple-digit year-over-year growth for the sixth consecutive quarter.
Alibaba continued expanding its poen-source initiatives as Chinese startup DeepSeek launched highly efficient AI model with performance comparable to OpenAI’s GPT-4o for a fraction of the computing power. The Hangzhou-based company open-sourced Qwen2.5-VL, its next-generation multi-modal model, and released its flagship MoE-based model Qwen2.5-Max. Both models deliver globally leading results across recognized benchmarks and are available to users and enterprises through Qwen Chat and our Bailian platform. As of January 31, more than 90,000 derivative models had been developed on Hugging Face based on the Qwen family of models, making it one of the largest AI model families worldwide.
“Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate,” Wu said. “We will continue to execute against our strategic priorities in e-commerce and cloud computing, including further investment to drive long-term growth.”
Revenue from Alibaba International Digital Commerce Group (ADIC) soared 32% YoY to RMB37.76 billion for the December quarter, following a 29% YOY increase three months ago. The international division, which encompasses Lazada and the Temu-like AliExpress, has become the second biggest segment by sales since it overtook the cloud business in the quarter ended last December. It remained a double-digit growth as the fastest-growing business segment. Sales of ADIC was primarily driven by strong performance of cross-border businesses.
The adjusted EBITA logged a loss of RMB4.95 billion, expanding 57.4% from the loss in the same quarter 0f 2023. The losses mainly resulted from the increase in investments in Trendyol’s cross-border businesses and AliExpress, partly offset by Lazada’s significant reduction in operating losses due to its improvement in monetization and operating efficiency, as well as improvements in profitability of Trendyol’s domestic businesses.
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